Experts Warn of "Massive Blow" to Annuity Rates

    LEEDS, ENGLAND, November 28, 2012 /24-7PressRelease/ -- According to leading financial website, This is Money, turmoil in the eurozone is "expected to push annuity rates to an all-time low" with those workers who are poised to retire "facing a massive blow to their pension income".

Why Will my Annuity Rate Change?

Men have traditionally received better annuity rates than women, for the same sized pension pot. This is because, on average, women live longer than men. The rate of your pension annuity determines the amount you will receive per year, every year, until you die; so because the average woman's pension pot needs to be spread across more years, the amount given per year is less.

In September 2010, however, a case was taken to the European Court of Justice regarding sex discrimination in the underwriting of insurance policies. The court ruled that sex discrimination in underwriting insurance policies is incompatible with the Charter of Fundamental Rights. This was part of The Treaty of Lisbon from December 2010.

What Does this Mean for Annuity Rates Now?

It means that from December 2012, the annuity rate for both men and women needs to be brought in line so men don't receive a better rate than women. There is still debate over exactly how much of an impact the ruling will have and whether it is advisable to purchase an annuity before the December deadline. The general consensus among industry experts is that the rate for women will rise, the rate for men will fall, and the rate for joint policies will also fall.

Should I Buy My Annuity Now?

Bill Burrows from BRGL says:

"We do believe that there may be an advantage in men considering investing in annuities before the middle of December deadline."

But as with any major financial decision, individuals should seek independent financial advice before making a decision. While it is generally agreed that for most men the annuity rate will fall, an for most women it will rise, there are many other factors that can impact the value of a pension, including the size of your pension pot and the type of policy or options chosen. Individual circumstances may vary.

Always do your research, seek advice, and shop around before making a decision. More information about annuities is available on The Retirement Centre website at: http://theretirementcentre.com/product/annuities.

The Retirement Centre is an independent company, designed to help people aged over 50 to make the right financial decisions and enjoy their retirement. To compare annuity rates and find the best deal for your annuity, visit The Retirement Centre website: http://theretirementcentre.com/product/annuities

For more information, call Dominic Fraser-Smith on 0113 320 5595 or email [email protected]

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